Stocks Crushed as Negativity Reigns
Tweet
Share
E-mail
Stocks are getting crushed Thursday following numerous warnings signs about a major global slowdown.
Just after lunch, the Dow Jones is down 402, Nasdaq down 77 and S&P 500 down 38.
With its announcement of "Operation Twist" Wednesday, Ben Bernanke and the Federal Reserve said there is "significant downside risks to the economic outlook, including strains in global financial markets." With Operation Twist, the FOMC intends to purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less. This announcement has pressured 10-year yields to all-time lows.
In addition to this stark warning from the Fed, China is showing more signs of slowing. Manufacturing data in the world's fastest-growing economy contracted for the third consecutive month in September. HSBC's China Flash Purchasing Managers' Index fell to 49.4 -- a reading below 50 indicates contraction.
There also remains concerns about liquidity issues with European banks. PIMCO's Mohamed El-Erian warned about French banks which could push Europe over the edge. "These are all signs of an institutional run on French banks," he said.
Gold is down over $69 to 1,738.70. WTI crude is down nearly $5.
Just after lunch, the Dow Jones is down 402, Nasdaq down 77 and S&P 500 down 38.
With its announcement of "Operation Twist" Wednesday, Ben Bernanke and the Federal Reserve said there is "significant downside risks to the economic outlook, including strains in global financial markets." With Operation Twist, the FOMC intends to purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less. This announcement has pressured 10-year yields to all-time lows.
In addition to this stark warning from the Fed, China is showing more signs of slowing. Manufacturing data in the world's fastest-growing economy contracted for the third consecutive month in September. HSBC's China Flash Purchasing Managers' Index fell to 49.4 -- a reading below 50 indicates contraction.
There also remains concerns about liquidity issues with European banks. PIMCO's Mohamed El-Erian warned about French banks which could push Europe over the edge. "These are all signs of an institutional run on French banks," he said.
Gold is down over $69 to 1,738.70. WTI crude is down nearly $5.
Create E-mail Alert Related Categories
Fed, Insiders' Blog, Market CheckRelated Entities
Pacific Investment Management Company, LLC (PIMCO), Ben S. Bernanke, Federal Open Market Committee, Standard & Poor's, HSBC, Crude Oil, Mohamed El-ErianSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
